Could a monthly antique shopping guide qualify as an exempt periodical when advertising occupied less than 90 percent of the sample issue?

Plain-English summary

Marysville compliance staff sent Tax Counsel an undated, unnumbered sample from a nonpermittee and asked whether it was exempt. The source calls the publication West-er-News; CDTFA's live annotation calls it Western News. Monthly publication was contemplated.

Although the publication was essentially an antique shopper's guide and subtitled that way, the sample contained information of general interest to certain reader groups. Its advertising did not exceed 90 percent of that issue's printed area.

Counsel concluded that it qualified under the historical statute and Ruling 50, assuming it would actually be published with the required frequency. The source had only one sample and did not establish advertising performance across the rule's 12-month testing period.

A December 1995 note signed “RLD” says former section 6362 had been repealed and directs readers to section 6362.7.

Source and live-annotation limits

The official PDF does not include the March 21 compliance memorandum, undated sample or any other issue, general-interest information, advertisements or product publicity, page-area measurements, issue history, monthly publication records, permit records, publisher or reader identity, distribution, contracts, prices, invoices, sales or uses, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, or later outcome. The nonpermittee, readers, advertisers, transactions, quantities, prices, advertising percentages beyond the single sample's result, and tax amounts are unidentified.

The source consistently styles the publication West-er-News; the live entry instead uses Western News. The source's December 1995 note is terse—§6362 repealed. Now see § 6362.7. 12/95 RLD.—and does not analyze the later statute. The original-text section preserves those forms and does not harmonize the title.

The live annotation supplies the Western News title and preserves the antique shoppers' guide character, general-interest conclusion, section 6362, date, periodical result, and nontax treatment. It omits the compliance request and counsel, nonpermittee, West-er-News source title, undated single sample, proposed monthly schedule and express frequency assumption, sample advertising result and Ruling 50's full definition, December 1995 repeal note and section 6362.7 pointer, missing records, source forms, and absent outcome.

What this means for you

Shopping-guide publishers and tax professionals

Preserve every issue, editorial content, advertisements and product publicity, issue-by-issue and 12-month area calculations, stated and actual schedules, permit records, distribution, contracts, invoices and sales, returns, exemption documents, tax calculations, and payments. This opinion had one sample and an unverified frequency assumption.

Common questions

Q: Did being a shopping guide automatically defeat the exemption?

A: No.

Q: What did the sample show?

A: General-interest information for certain groups and advertising below 90 percent of printed area.

Q: Was the result unconditional?

A: No. Counsel assumed publication at the frequency required by statute.

Q: Did counsel test a full 12 months of advertising?

A: No. The source identifies only one undated, unnumbered sample.

Q: Why do the source and live titles differ?

A: The opinion says West-er-News; the current annotation says Western News and does not explain the change.

Citations and references

• Former California Revenue and Taxation Code § 6362
• Former California Sales Tax Ruling 50
• California Revenue and Taxation Code § 6362.7, as identified in the source's December 1995 note
• March 21 compliance memo, sample and other issues, advertising and publication records, sales, tax records, and outcome — described or implicated but not documented

Verbatim support

From the official Tax Counsel memorandum:

The sample which you sent us does contain information of general interest to certain groups of persons, and we find that the advertising portion of the issue does not exceed 90 percent of the printed area of the issue.

We assume, of course, that the publication will be published with the frequency required by the statute.

§6362 repealed. Now see § 6362.7. 12/95 RLD.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.2080
• Original supporting opinion: 385.2080 PDF

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Marysville – Compliance (COE)

From:

Tax Counsel (TPP:GJJ) - Headquarters

Subject:

West-er-News

385.2080

April 14, 1969

Nonpermittee

This is in reply to your memorandum of March 21, 1969. The question has been raised whether the publication “West-er-News” is exempt from the tax. You have forwarded to us for our review an undated, unnumbered issue of the News. It is contemplated that the News will be published monthly. As you are aware, section 6362 of the Revenue and Taxation Code exempts from the tax any newspaper or periodical regularly issued at average intervals not exceeding three months. The term “periodical” is limited to those publications which appear at stated intervals, each issue of which contains news or information of general interest to the public, or to some particular organization or some group of persons. Each issue must bear a relation to prior or subsequent issues in respect to continuity of literary character or similarity of subject matter and there must be some connection between different issues of the series in the nature of the articles appearing in them. The term does not include shopping guides or other publications of which the advertising portion, including product publicity, exceeds 90 percent of the printed area of the entire issue in more than one half of the issues during any 12-month period [ruling 50]. Although the News is essentially an antique shopper’s guide, and is subtitled as such, it is our opinion that it nevertheless qualifies as an exempt periodical under section 6362 and ruling

50. The sample which you sent us does contain information of general interest to certain groups
    of persons, and we find that the advertising portion of the issue does not exceed 90 percent of the printed area of the issue. We assume, of course, that the publication will be published with the frequency required by the statute.
    §6362 repealed. Now see § 6362.7. 12/95 RLD.

GJJ:ph